Kenya’s hopes for a reduction in the cost of cooking gas may take a little longer than expected, especially after the government rejected a deal with Saudi Aramco worth 2.5 billion shillings.
The Energy Cabinet Secretary, Mr. Wandayi, told a Senate committee that the government had rejected the deal due to unfavorable terms, especially for Kenya.
The deal, Wandayi said, came with a number of conditions, among them granting the Saudi company a monopoly in supplying cooking gas to Kenya.
“The agreement did not go through because we could not agree on the terms. One of the key conditions was exclusive supply of LPG, which we found unacceptable,” Wandayi said.
The deal formed part of a Saudi plan to make cooking gas more affordable and accessible to residents in Kenya, with a target to distribute 8.4 million gas cylinders and also improve storage and import facilities in the country.
However, following the rejection of the deal, hopes for a reduction in the cost of cooking gas seem to have been delayed, especially after earlier promises by the government to make gas more affordable for residents in Kenya.
For the last two years, Kenya has been in talks with Saudi Arabia to establish a floating storage facility to process liquefied petroleum gas near the Port of Mombasa. The facility was to store and process up to 30,000 tonnes of gas until the construction of the onshore facility is complete.
However, this is no longer set to happen after the talks collapsed.
Wandayi informed the nation that the government is planning to work with private companies to develop the gas sector. He noted that the government had already invited proposals on how to develop the sector. Further, four companies have been identified to assist in the manufacture of gas cylinders.
“We will continue working closely with private investors to grow this sector, especially in building storage and import infrastructure,” Wandayi noted.
Despite the failure of the talks, Wandayi assured Kenyans that they do not have to worry about fuel supplies. He noted that the nation had enough petroleum supplies to last until April due to the agreements with international energy firms.
However, for now, Kenyans will have to continue living with high prices of cooking gas until the government finds an alternative.
